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The importance of inheritance

A recent study by the Institute of Fiscal Studies has shown both how the wealth of elderly generations is on the rise and, also, the growing importance of inherited wealth.

According to the IFS, as a result of rising house prices and a higher proportion of home ownership than ever before, more and more of the over 80s are leaving behind substantial assets on their death. The proportion of those expecting to leave assets worth at least £150,000 has apparently nearly doubled in the last ten years, from 24% in 2003 to 44% in 2013.

On the other side of the coin, the report shows that the upsurge in house prices and the cost of living has meant a different picture amongst the younger generations. They, instead, are becoming increasingly likely to rely on inherited wealth to support them in later life.

Both trends are interesting to consider in themselves, but they also provide a salutary reminder of the importance of succession planning. On the one hand, a carefully-drafted Will can help to maximise your chances of claiming the reliefs and exemptions which may be available to your estate, such as the new Residence Nil Rate Band coming into force from April. As well as this, though, ensuring you make a will can also be a useful tool to benefit the younger generation in your family line and pass wealth to those, such as grandchildren and great-grandchildren, who may be at a stage in their lives when it is most needed.